AirAsia X Has Big Plans For Record A330 Order

The low-cost, long-haul airline business model has been slow to gather momentum in other parts of the world, but it appears set to boom in Asia. Latest developments see AirAsia X placing a major widebody order that would extend its reach to Europe, and two other low-cost carriers (LCC) revealing plans to launch a long-haul joint venture in Thailand.

The largest Asian LCCs have several hundred narrowbody aircraft on order, which will intensify competition in the short-haul market in coming years. So looking for new markets further afield is a logical next step. Most of the region's leading LCCs are thinking this way, and are either operating long-range widebodies or have them on order.

Malaysia-based AirAsia has gone further down this path than its rivals, however. It established AirAsia X in 2007 specifically to pursue long-haul opportunities, and it already operates a fleet of 16 A330-300s. On Dec. 18 it announced an order for 25 A330-300s for delivery from 2015, to be supplemented by another six A330s it will lease from the International Lease Finance Corporation. The latest Airbus deal will boost the airline's outstanding A330 orders to 40, and it is also scheduled to receive 10 A350-900s.

AirAsia X says the new order includes the extended-range version of the A330-300, which provides it with “the ability to offer non-stop service to destinations in Europe or one-stop service to the U.S.” AirAsia X previously operated flights to London and Paris using A340-300s, but cut those routes in March 2012 because it could not make them viable with that aircraft type and Europe's high taxes and fees.

Airbus first unveiled extended-range options for its A330 family in November 2012; they will be available to operators in 2015. The upgrade certainly caught the eye of AirAsia X, as its latest order is Airbus's largest ever for the A330.

The order signals a new wave of growth for AirAsia X. Group CEO Tony Fernandes says the additional aircraft “further cater to our expansion plans in Malaysia,” as well as “other long-haul ventures planned across Asia.”

AirAsia X CEO Azran Osman-Rani has previously stated that the carrier's goal is to launch overseas joint ventures in countries where AirAsia already has established short-haul affiliates, starting with Thailand and Indonesia. The Thailand AirAsia X joint venture is furthest advanced, and is expected to be operational in the first quarter of 2014.

Meanwhile, Thai airline Nok Air and Singapore's Scoot announced on Dec. 16 that they plan to launch a long-haul LCC to be based in Bangkok. Nok is partly owned by Thai Airways, and Scoot is a subsidiary of Singapore Airlines.

The carriers have signed a memorandum of understanding to set up a joint venture called NokScoot, which they say will operate widebody aircraft on international routes. Nok stresses that this move will allow it to boost its presence overseas, while Scoot says that Bangkok is “a logical hub for Scoot to expand to.”

Nok will control a 51% stake, and Scoot will hold 49%. The initial investment will be THB 2 billion ($61.2 million). The carriers say details about fleet and network will be announced at a later date.

Scoot already operates Boeing 777-200ERs on medium and long-haul international routes from Singapore. It is due to begin receiving 20 Boeing 787 orders in late 2014 to replace its 777s, and it is possible that some of the 787 orders would be channeled to NokScoot. However, the partners reportedly intend to operate 777s at first.